There are a seemingly endless supply of technical indicators a trader or investor can choose from, and since many are derived solely from one data series - the price of a security, it's important to complement these by including sentiment indicators as part of any market analysis.
19th September 2011www.sentimenTrader.com
SentimenTrader began in 2001 and is operated by Jason Goepfert, a trader of 15 years, the founder and president of Sundial Capital Research, Inc.
Sundial's focus is on "the research and practical application of mass psychology to the financial markets". Their work has been mentioned in prominent media such as Barron's, CNN, CNBC, SFO Magazine, The Economist, Reuters, The Wall Street Journal, Active Trader, Futures, TheStreet.com and TradingMarkets.
SentimenTrader is a subcription access website, they offer a 14 day trial with no obligation, along with options to subscribe on a monthly ($25), quarterly ($70) or yearly ($250) basis.
Once you're logged in you find a well organized page with a bar along the top with drop down menus available under most headings, aside from the "Intraday" heading.
The data is available to download in Excel format for those that wish to, the last column is a Bullish - Bearish scale that allows a quick glance showing how bullish or bearish the reading is. You can also bring up charts depicting the data;
For Bonds, there are indicators for Rydex fund flows, Put/Call ratios, Trader Commitments and Surveys. What caught my eye was the Treasury Bond Indicator Score, this a form of composite indicator proprietary to SentimentTrader where they weighted and combined data from sentiment indicators for the bond market, together with put/call ratios, Rydex mutual fund flows, sentiment surveys and Commitments of Traders data. The result is an overbought/oversold indicator that looks very useful;
For Commodities, there are indicators for Trader Commitments, Public Opinion, Rydex Fund Flow and Individual Contracts. For the Individual Contracts, all major Currencies, Energy, Metals, Grains, Softs and Meat contracts are covered, although it should be noted that Platinum and Palladium are not featured. Seasonality charts are also available for each contract listed within the Individual Contracts section.
The "Public Opinion" charts are of notable interest, an excerpt from an explanation on the website;
"To calculate this gauge of public opinion, we have created an index based on many of the established surveys currently in existence, some of which are noted below. We have looked at the history of the surveys to determine how accurately they have measured extremes in the past, and weighted their influence in our indicator appropriately based off that analysis."
The following is SentimenTrader's Public Opinion chart for silver as it was towards the end of April 2011;
This chart played an important role in my analysis of the silver market back then, I was not a subscriber back then, but I found this chart and it led me to their website. The analysis was posted on Green Energy Investors (GEI), with others contributing theirs also, in a collaborative effort that led to a very accurate and profitable top call in silver. Even some of the non-traders took action, such as swapping silver for gold.
The initial thread on GEI that started that process, can be found at: "$50-ish Peak in Silver Coming? Hunting the Top "
Moving on to the Models section, these are also proprietary to SentimenTrader;
In a similar vein to the Treasury Bond Indicator Score these are weighted composites of sentiment indicators, also depicted as oscillators, suggesting overbought/oversold conditions. These are offered over a variety of timeframes, from intraday to a few days, weeks or months. Since I mainly trade E-Mini NASDAQ futures the STEM.MR NASDAQ is of potential interest (although I haven't properly studied it yet) and could be useful as a filter for trading signals from other indicators, as it suggests points where rallies may be overdone, and where sell-off's may be nearing an end.
The charts on the Intraday section show two week periods for the S&P 500 and NASDAQ 100, and are updated every 15 minutes, charts showing the STEM.MR model are shown beneath each, along with cumulative tick, a price oscillator, breadth charts, VIX and Put/Call ratios. This isn't part of the site I generally use since I prefer to have my own charts set up through my trading platform with my own settings applied however for those not at their normal workstation it's helpful to have on the site, rather than you having to look elsewhere.
Finally, under the More section you can find seasonality charts for each month of the year for the S&P 500 with data covering 1950 - 2006. You can also check seasonal performance of the S&P 500 around various holidays eg Labor Day, New Year's Day etc. This is an interesting feature I haven't come across before and allows you to quickly gain an understanding of market activity around various seasonal dates.
Other features I like from this website are the Sentiment Summary on the main page that gives a brief run down for the day and some commentary, both on a 1 to 5 day and 1 to 3 month basis. As a subscriber you also get a daily email with interesting commentary and analysis including general equity market indicators, and also details and analysis of the top sentiment stories, the most recent being about a Wall Street research report highlighting a long-term sell signal from the Coppock Curve indicator. You can also create a list of your favorite charts, saving you time when you want to refer back to your preferred charts.
Overall I think sentimenTrader is well worth the subscription. The fact that all of the information is well organized and formatted makes it very user friendly and they've covered a lot of bases with the range of content, making it appealing to both the trading and investing community. I'm also a big fan of their proprietary indicators.